Bulwark Takes: WSJ Finally Admits Trump Doesn't Understand Money

Episode: WSJ Finally Admits Trump Doesn't Understand Money
Release Date: February 13, 2025
Host: Tim Miller
Publisher: The Bulwark

Introduction

In this episode of Bulwark Takes, host Tim Miller delves into a significant editorial published by the Wall Street Journal (WSJ) titled "Trumponomics and Rising Inflation." Breaking away from the WSJ's traditional support of Republican economic policies, the editorial critically examines President Donald Trump's understanding of monetary policy and its implications on the U.S. economy.

WSJ Editorial Overview

Tim Miller begins by highlighting the rarity of the WSJ's editorial board challenging Republican economic strategies. Traditionally seen as a stronghold for pro-GOP financial viewpoints—championing tax cuts, reduced social services, and supportive stances on deregulation—the WSJ's recent critique marks a notable departure.

• Key Point: The WSJ editorial argues that President Trump does not comprehend the intricacies of money supply and monetary policy, particularly regarding interest rates and their role in controlling inflation.

Quote [01:30]:
"Does President Trump understand money? Not money as in cash, but the supply of money, the price of money as measured by interest rates and their impact on inflation? The Wall Street Journal's answer is that it would appear to be no."

Tim Miller's Analysis

Miller acknowledges his own bias, admitting to a "tinge of Trump derangement syndrome." However, he emphasizes the importance of considering critiques from traditionally pro-Republican sources like the WSJ to gain a well-rounded perspective.

Quote [00:45]:
"I certainly admit to having a tinge of Trump derangement syndrome. And so that's why I also like to show you guys critiques that are coming from people that are credulous when it comes to Donald Trump."

He discusses the WSJ's criticism that Trump's call to lower interest rates amid rising inflation is misguided. Miller elaborates on how Trump's policies—ranging from tax cuts for the wealthy to increased tariffs and restrictive immigration—are inherently inflationary.

Quote [11:15]:
"He just doesn't understand inflation. He just wants the stock market to go up, interest rates to go down."

Impact of Trump's Policy Proposals

Miller breaks down the multifaceted impact of Trump's economic proposals:

1. Interest Rates: Trump's demand for lower interest rates aims to make mortgages and borrowing cheaper. However, Miller points out that lowering rates in an inflationary environment can exacerbate price increases.

   Quote [04:50]:
   "Trump sent out a bleat. The Fed was basically bullying Federal Reserve Jerome Powell, saying that you should lower interest rates so people can get a cheaper price on their mortgage, get cheaper prices on other borrowing now."

2. Tax Cuts: Particularly those favoring the wealthiest, which Miller argues lead to increased consumer spending and further inflation.

3. Tariffs: Imposing tariffs on goods can raise prices by limiting supply and increasing costs for consumers.

4. Immigration Policies: Reducing the labor supply through deportations and stricter immigration controls can lead to higher wages and production costs, contributing to overall price hikes.

Quote [08:30]:
"Whether it's tariffs, whether it's less immigration, whether it's the massive tax cut that they're proposing, all of that is inflationary."

Economic Consequences

Miller underscores the real-world implications of Trump's policies on everyday Americans:

• Housing Market: Higher mortgage rates deter home purchases and refinancing, as seen in his personal example of moving to New Orleans for better rates.

  Quote [03:20]:
  "We moved to New Orleans after interest rates went up. And so we're paying a higher interest rate on our mortgage than we were in California."

• Consumer Prices: Persistent inflation affects the cost of living, making essentials like groceries and housing more expensive.

• Political Ramifications: The WSJ posits that continued inflation could erode President Trump's job approval ratings, potentially jeopardizing his political standing.

  Quote [13:00]:
  "If this persists, Trump won't have a 53% job approval rating for long."

Conclusion

Tim Miller concludes by acknowledging the WSJ's critical stance as a rare and valuable perspective that underscores the flaws in Trump's economic strategy. He anticipates that despite the WSJ's warnings, Trump's policies will likely continue to drive inflation higher, ultimately harming the economy and his political fortunes.

Final Quote [15:30]:
"The people at the Wall Street Journal editorial board at least like understand how markets work, how monetary policy works. And they are sending a flashing red light to Donald Trump that says what you are doing is only going to increase costs and only going to lead to greater inflation."

Miller commends the WSJ for their forthright analysis and underscores the importance of such critiques in the broader discourse on economic policy.

Key Takeaways

• The Wall Street Journal has publicly criticized President Trump's economic policies, highlighting a misunderstanding of monetary policy and its effects on inflation.
• Trump's calls for lower interest rates amidst rising inflation are seen as counterproductive, potentially leading to higher consumer prices.
• Policy measures such as tax cuts for the wealthy, tariffs, and restrictive immigration are identified as inflationary drivers.
• The sustained inflationary environment poses significant risks to Trump's political support and the overall economic well-being of Americans.
• The episode emphasizes the value of diverse perspectives, even from traditionally aligned sources like the WSJ, in evaluating and critiquing political and economic strategies.

This comprehensive analysis provides listeners with a nuanced understanding of the current economic debates surrounding President Trump's policies, enriched by Tim Miller's incisive commentary and supported by direct quotes from the episode.